What’s Behind Kennedy’s Popularity With Silicon Valley Moguls

The money men help Robert Kennedy Jr.’s political wave

As the 2024 race heats up, President Biden faces a persistent thorn in his side: Robert Kennedy Jr., the scion of the Democratic dynasty, who touts both a range of fringe theories and surprisingly sustainable polling numbers.

The Times notes that Mr. Kennedy has received support from a range of political outsiders. But perhaps his most powerful base is a group of finance and tech moguls, including Twitter co-founder Jack Dorsey, who have given him money and something arguably more important: fame.

Kennedy appeals to many of their interests. That includes things like cryptocurrency – he has spoken at industry conferences and accepts campaign donations in Bitcoin. Mr. Kennedy has also embraced some of their favorite podcasts, speaking with popular hosts like Joe Rogan and the venture capitalists behind the “All-In” show.

And in endorsing Mr. KennedyMr. Dorsey (who is also a major Bitcoin booster) quoted the candidate’s criticism of government censorship.

But Mr. Kennedy’s strongest appeal may be his iconoclasm, especially his willingness to counter institutional thinking on things like the benefits of vaccines. (That led to YouTube removes a Kennedy interview because it promoted vaccine misinformation.)

“I think he’s a Democratic version of Donald Trump with a lower intellect, so he’s pulling in libertarian-leaning, anti-woke social-liberals as a protest voice,” Robert Nelsen, an investor with Arch Venture Partners, said. told KFF Health News.

Wealthy supporters have given him money and airtime. Figures include Elon Musk and the investor David Sacks called for a public debate between Mr. Kennedy and Peter Hotez, a vaccine researcher who criticized Mr. Rogan’s decision to allow the candidate to spout baseless conspiracy theories on his show.

Mr Sacks and his co-hosts Jason Calacanis and Chamath Palihapitiya have also featured Kennedy on their podcast, praising him for being “willing to participate in lively debates” and “bringing down all these institutions of power”. Mr. Sacks, who also interviewed Kennedy along with Mr. Musk at a Twitter Spaces event, and Mr. Palihapitiya held a fundraiser for him this month that, according to CNBC, Raised $500,000.

Meanwhile, entrepreneur Mark Gorton helped create a Kennedy-focused PAC that, according to leaders, has raised at least $5.7 million. And CNBC reported that investor Omeed Malik plans to host a $6,600 per capita fundraiser in the Hamptons for Kennedy next month.

HERE’S WHAT HAPPENING

Smoke from Canadian wildfires once again threatens US cities. New York City and other places in the Northeast are facing the return of dangerous air quality after whitish smoke enveloped Midwestern cities like Chicago. Mayors warned residents to take precautions, raising the prospect of further disruptions to outdoor activities and businesses.

The Kremlin tries to conquer the Wagner Group empire. Russian officials told leaders in countries like Syria and the Central African Republic, where the mercenary group operated, that Moscow was take over its activities there. Meanwhile, a top Russian general who had inside information about the short-lived Wagner Group uprising has reportedly been arrested.

Nvidia warns of further US restrictions on AI chip exports. The semiconductor giant’s CFO said additional steps need to be taken Restrict sales to China of chips intended for artificial intelligence systems could lead to “permanent loss of opportunity” for US companies in an important market. Shares of Nvidia fell yesterday after The Wall Street Journal reported on White House deliberations on new export rules.

Aspartame will reportedly be declared “possibly carcinogenic”. The World Health Organization next month says it’s one of the world’s most popular artificial sweeteners could cause cancer, according to Reuters. Aspartame is used in countless products, including diet soda, chewing gum, and candy.

The fate of Microsoft’s big deal may soon be decided

Yesterday was a big day in the proceedings over the FTC’s attempt to block Microsoft’s $70 billion acquisition of video game titan Activision Blizzard, with three key players testifying: Microsoft CEO Satya Nadella; Bobby Kotick, the leader of Activision; and Jim Ryan, head of Sony’s PlayStation division (and gave video testimony).

If the presiding judge agrees to delay the transaction, as the FTC requests, Microsoft’s deal is likely to fall through. But if she doesn’t, the bureau could drop its opposition.

Mr. Nadella and Mr. Kotick said the acquisition would not harm consumers. The Microsoft chief reiterated that top titles like Call of Duty would not be limited to the Xbox platform. “If it were up to me, I would really like to get rid of all ‘exclusives on consoles’,” Mr Nadella said – and blamed Sony for maintaining that business model.

Mr. Kotick agreed: “You’d revolt if you removed the game from one platform.” (That said, Mr. Ryan testified that he was concerned that PlayStation would receive “deteriorated” versions of Call of Duty if the deal went through.)

But testimonials showed that Microsoft is not averse to exclusive offers. The company’s gaming chief Phil Spencer has acknowledged that the company has had discussions about excluding other Activision games from PlayStation.

The FTC tried to expose contradictions in Microsoft’s case, including Mr. Nadella’s recent brag about sales figures for the latest Xbox console, despite Mr. Spencer saying the platform was “not a robust business”. And the firm’s lawyers noted that Mr. Nadella had told investors that cloud gaming’s new business was “one of the big bets that paid off,” despite downplaying that market’s importance in court.

a decision is not expected until Monday. On points, Judge Jacqueline Scott Corley seemed skeptical of the FTC’s questions. Historically, the FTC drops its opposition to a deal if it loses an injunction.

If that happens, the final hurdle for Microsoft would be an appeal against a UK regulator’s decision to block the transaction – a potentially even tougher battle.

Central bankers warn of inflation

Two major themes emerged at this week’s meeting of central bankers in Portugal: policymakers are far from done raising rates, as inflation remains stubbornly high and it is not yet clear how high they will rise.

There will be a significant inflation data dump tomorrow. The Department of Commerce will release its Personal Consumption Expenditure (PCE) report at 8:30 a.m. Eastern Time, a few hours after the Eurozone’s preliminary consumer price report is released.

Both reports are expected to show headline inflation cooling, but that prices are still well above policymakers’ target of 2 percent. Fed Chairman Jay Powell said yesterday that core inflation — excluding energy and food prices — is unlikely to reach that level until 2025.

That forces the Fed to raise interest rates. Mr. Powell added that the Fed could raise rates at successive meetings — and keep them at a “restrictive” level for some time. Speaking of cuts, he said “We’re a long way from that,” adding, “That’s not something we’re thinking about right now.”

The futures market this morning appears to be getting that message, betting on further rate hikes this year and pushing the forecast for austerity well into 2024.

The good news: Powell and his colleagues, including Andrew Bailey, the governor of the Bank of England, said a strong labor market has kept their country out of recession for now.

What to see tomorrow: Economists predicted the “headline” PCE in May was 3.8 percent, the lowest level in two years. But “core” PCE is expected to tell a different story, at 4.7 percent. One possible bright spot: Some economists expect used car prices and rentals to begin to fall this summer.

Inflation is rising hotter in Europe. The CPI data is expected to show that prices are up 5.7 percent from a year ago. Christine Lagarde, the president of the ECB, has warned that inflation is starting to take hold in all layers of the economy. Her antidote to that: more rate hikes are on the horizon.

$1 trillion

– The decline in the value of deals announced in the first half of 2023, compared to the same period last year, according to Bloomberg. The decline in M&A and IPOs has made this one of the worst deal-making periods in a decade as high inflation, funding pressures and geopolitical tensions have undermined activity.

Just how strong are the country’s banks?

Months after the collapse of Silicon Valley Bank sparked panic among America’s smaller lenders, the Fed yesterday gave the nation’s largest banks a clean bill of health. But regulators warned that their recently completed stress tests were just one way to evaluate stability — and that other risks could still pose a threat.

What the tests found: The country’s 23 largest banks could withstand a 40 percent drop in commercial real estate prices — a major concern for lenders right now — and $541 billion in losses without failing. They also coped with high unemployment and sharp falls in house prices.

Although the investigations began well before the SVB’s troubles in March, regulators examined whether eight banks heavily involved in trading could withstand sudden panic in the markets for stocks, bonds and other financial instruments.

Bank investors watched the tests closely, because strong results mean lenders are likely to lower their capital requirements, allowing them to buy back more shares or pay higher dividends.

Banks are expected to announce their new capital requirements tomorrow, along with any changes to investor payouts.

But regulators warned that the stress tests are not the last word on banks’ health. “This stress test is just one way to measure that strength,” said Michael Barr, the Fed’s chief banking supervisor.

Regulators are still reviewing the rules. In addition to stepping up supervision, authorities are expected to tighten capital requirements, including for smaller lenders. That said, even if SVB was subject to the tests this year, The Financial Times notes maybe over.

• In other banking news: Bank of America is at over $100 billion in paper losses tied to bad bond deals, much more so than its rivals.

READING THE SPEED

Offers

Artificial intelligence

• Top news publishers, including The New York Times Company, are reportedly discussing the formation of a coalition to address the effects of artificial intelligence on their industry. (WSJ)

• “How easy is it to fool AI detection tools?” (NYT)

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